A Brief Look at the Foreclosure Process

If you are facing foreclosure, it is important to get informed. Being informed may enable you to find ways that you can get into a new home and protect your credit before it’s too late (see Foreclosure Relief Options). Below is a brief description of the foreclosure process so that you know what to expect should you face foreclosure at some point in the future (Note: foreclosure laws and time periods vary from state to state):

• As soon as you miss your first mortgage payment, your lender may initiate the foreclosure process. Phone calls and demand letters usually start at this point.


• Lenders usually give you a limited period of time in which to bring your loan current; this grace period is usually between 1-3 months. If you are unable to bring your loan current, your lender will issue a Notice of Default (NOD). A Notice of Default is the official notification you receive to inform you that you are facing foreclosure.


•  The Reinstatement Period begins after the Notice of Default is issued. If you are still unable to bring your loan up-to-date during this period, the foreclosure process will ensue.


• After the Reinstatement Period, a Notice of Sale will be issued to the homeowner; this notice will also be posted on the property, recorded with the County Recorder’s Office and published in local newspapers.


• Foreclosures are finalized with a Trustee Sale; this usually takes place about three weeks after the Notice of Sale was posted. At the Trustee Sale, the home is auctioned and sold to the highest bidder in an attempt to help the lender recover as much money as possible.

If you are facing financial difficulties and can’t make your mortgage payments, it is a good idea to talk to you lender and see what kind of relief options they may offer you as an alternative to foreclosure (see Working with Creditors http://www.bankruptcyinfonetwork.com/working-creditors.htm). Being proactive may just help you avoid foreclosure and give you the opportunity to enjoy your home for many years to come (see Avoiding Foreclosure http://www.bankruptcyinfonetwork.com/avoiding-foreclosure.htm). An experienced attorney should also be able to help you navigate difficult times and provide you with the knowledge you need to make informed decisions about how best to deal with your financial situation.